GR 147778; (July, 2008) (Digest)
G.R. No. 147778 ; July 23, 2008
PHILIPPINE STOCK EXCHANGE, INC. and the MEMBERS OF ITS BOARD OF GOVERNORS, Petitioners, vs. THE MANILA BANKING CORPORATION and the SECURITIES INVESTIGATION CLEARING DEPARTMENT HEARING PANEL, Respondents.
FACTS
Respondent The Manila Banking Corporation (TMBC) acquired Manila Stock Exchange (MSE) Seat No. 97 through an execution sale in 1980. The MSE initially refused to register TMBC’s ownership due to its by-laws but later issued an Acknowledgment Letter in 1996 recognizing TMBC’s legal or naked title over the seat. Following the unification of the MSE and the Makati Stock Exchange into the Philippine Stock Exchange, Inc. (PSEI), a certificate of membership was issued in 1994 to the original seat holder, Roberto Recio, as Member No. 29. TMBC, believing this seat corresponded to its acquired MSE seat, sought PSEI’s recognition of its proprietary interest. Upon PSEI’s repeated refusal, TMBC filed a Petition for Mandamus with Claim for Damages before the SEC’s Securities Investigation and Clearing Department (SICD).
Petitioners PSEI and its Board of Governors moved to dismiss the petition on grounds of lack of jurisdiction, failure to state a cause of action, and impropriety of mandamus. The SICD Hearing Panel denied the motion. The SEC en banc and subsequently the Court of Appeals upheld this denial, prompting the petitioners to elevate the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the SEC (and later the proper courts, following jurisdiction transfer) correctly denied the motion to dismiss TMBC’s petition.
RULING
The Supreme Court denied the petition and affirmed the lower tribunals’ rulings. The denial of a motion to dismiss is an interlocutory order not typically subject to certiorari unless tainted with grave abuse of discretion. No such abuse was found. The SEC en banc correctly sustained the hearing panel’s finding that the petition alleged factual issues requiring a full trial. These issues extended beyond mere membership questions to include potential devices and schemes amounting to fraud under the SEC’s then jurisdiction (PD 902-A, Sec. 5). The allegations, if proven, could constitute a cause of action.
The Court clarified that while jurisdiction over such intra-corporate disputes was later transferred to the Regional Trial Courts by the Securities Regulation Code, the principle that a motion to dismiss should be denied if the pleading asserts a right to relief on any possible legal theory remains. The allegations in TMBC’s petition were sufficient to warrant a trial on the merits to determine the validity of its claim over the seat and the propriety of the relief sought. Thus, the lower tribunals committed no reversible error in refusing to dismiss the case at a preliminary stage.